Modeling the Environmental and Regulatory Impacts of Cryptocurrency Mining: A System Dynamics Approach to Policy Evaluation

Document Type : Research Article

Authors

1 PhD Student, Department of Public Administration, School of Management and Accounting, Allameh Tabataba'i University, Tehran, Iran, Currently on Exchange, Department of Marketing and Supply Chain, School of Business and Economics,

2 Publc Administration Department, School of management and accounting, Allame Tabatabai Univ.

Abstract

The research focuses on the rapid rise of digital currencies and their increasing popularity due to attractive investments, ease of access to mining and trading, and participation by both individual and institutional investors. This growth has created significant challenges, extending beyond economics to social, political, and regulatory domains. These developments have introduced complex decision-making challenges for policymakers.

Cryptocurrency policies are often unclear, and issues such as illegal mining threaten power grid stability, presenting regulatory and environmental challenges. Other issues include tax evasion, security concerns, energy consumption, and uncertainty around the monetary nature of cryptocurrencies. System dynamics offers a comprehensive method for modeling and understanding these complexities, helping policymakers simulate scenarios and predict long-term impacts.

System dynamics modeling is particularly suited for analyzing feedback loops, time delays, and non-linear interactions in cryptocurrency ecosystems. This approach has been successful in various fields like health and the economy for addressing complex policy issues. The project involves collecting data from research, formulating dynamic hypotheses, and building models that reflect the system's interactions and potential leverage points for effective policymaking.

By using this model, the research explores behaviors and factors influencing cryptocurrency exchanges and circulation. It emphasizes the importance of system dynamics in simulating scenarios and guiding policymakers in making informed decisions about cryptocurrency regulations and ecosystem management.

Keywords

Main Subjects

Files

Share

How to cite

Statistics